Trial Balance

1
Trial Balance

• Some amounts on the trial balance are out of date

2
Supplies

• The Supplies balance shows the total supplies
  purchased in the year

• Adjusting Entries

3
What is
4
What Should be

• What the balance should be is determined from
  someone counting the supplies that remain in the
  business at the end of the year

5
The Adjustment
6
Expense What is

• The income statement account related to Supplies
  is shown above

• The accounting clerk has not used this account
  during the year

7
Expense What Shoud be

• What the balance should be is the amount of
  supplies used up during the year

8
Expense Adjustment
9
Adjusting Entry

• The adjusting entry as it would appear in the
  general journal

10
Prepaid Insurance

• The Prepaid Insurance balance shows the total
  cost of insurance bought in the year

• Adjusting Entries

11
What is
12
What Should be

• What the balance should be is determined from
  someone calculating the portion of the insurance
  policy that is unexpired

13
The Adjustment
14
Expense What is

• The income statement account related to Prepaid
  Insurance is shown above

• The accounting clerk has not used this account
  during the year

15
Expense What Should be

• What the balance should be is the amount of the
  insurance policy that has expired at years end

16
Expense Adjustment
17
Adjusting Journal Entry

• The adjusting entry for insurance as it would
  appear in the general journal

18
Accounts Payable

• The Accounts Payable balance does not include two
  invoices that arrived late

• Adjusting Entries

19
What is

• Little analysis is needed for this adjustment

20
The adjustment

• Simply enter the late invoices

21
The second adjustment

• Simply enter the late invoices

22
What Should be

• And calculate the adjusted balance

23
Expense What is
24
The Adjustments
25
The What Should bes
26
The General journal

• The adjusting entry for late invoices as it would
  appear in the general journal

27
Summary 1

• The adjusting entries have brought balance sheet
  accounts up to date

Balance Sheet
28
Summary 2

• And have recorded expenses in related accounts on
  the income statement

Balance Sheet
Income Statement